China upbeat on U.S. trade talks, but South China Sea tensions weigh

BEIJING (Reuters) – China struck an upbeat note on Monday as trade talks resumed with the United States, but also expressed anger at a U.S. Navy mission through the disputed South China Sea, casting a shadow over the prospect for improved Beijing-Washington ties.

FILE PHOTO: Containers are seen at the Yangshan Deep Water Port in Shanghai, China April 24, 2018. REUTERS/Aly Song

The United States is expected to keep pressing China on longstanding demands that it reform how it treats American companies’ intellectual property in order to seal a trade deal that could prevent tariffs from rising on Chinese imports.

The latest talks will begin with working level discussions from Monday-Wednesday before high-level discussions at the end of the week. Negotiations concluded in Washington last month without a deal and with the top U.S. negotiator declaring that a lot more work needed to be done.

Lower-level officials will kick off the meetings on Monday, led on the American side by Deputy U.S. Trade Representative Jeffrey Gerrish.

Higher principal-level talks will take place Thursday and Friday with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

Chinese Foreign Ministry spokeswoman Hua Chunying told reporters that Beijing hopes to see good results from the talks.

The two sides are trying to hammer out a deal ahead of the March 1 deadline when U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent.

U.S. President Donald Trump said last week he did not plan to meet with Chinese President Xi Jinping before that deadline, dampening hopes that a trade pact could be reached quickly.

Escalating tensions between the United States and China have cost both countries billions of dollars and roiled global financial markets.

The same day the latest talks began, two U.S. warships sailed near islands claimed by China in the disputed South China Sea, a U.S. official told Reuters.

Hua said the ships entered the waters without China’s permission, and that China expressed firm opposition and dissatisfaction at the move.

China claims a large part of the South China Sea, and has build artificial islands and air bases there, prompting concern around the region and in Washington.